Associate Handbook - Honda Transmission Mfg. of America

Ohio Transmission Plant

Updated April 8, 2021

April 1, 2021 Dear Associate,

Honda Development and Manufacturing of America, LLC

As Honda becomes a more unified company in the U.S., Human Resources (HR) is working to develop a simple, more unified framework with standard policies and systems that will best support our entire workforce now and into the future. Please see the matrix below for existing Transmission Plant- Ohio Manufacturing Division policies which have been updated and as indicated, have varying effective dates. Additional policy changes will be announced in phases throughout 2021. Until the effective date, associates will continue to follow the policies of their previous company prior to HDMA or as individually notified if recently hired.

All Associates (All Production and Non-Production roles (Exempt and Non-Exempt)

Policy Application

Administration

Job Assignment, Transfer and Promotion

Policy

Business Travel

NEW Career Levels, Skills Framework

and Competencies

Effective Date

4/1/2021

4/1/2021

Page Number

16

N/A

Change Point

Beginning April 1, 2021, Honda travel and expense policies will be updated to support and guide associates who travel on behalf of Honda or incur expenses while doing business. Those who have business travel can access the new travel and expense policies in advance and are encouraged to begin familiarizing themselves with the new policies.

Associates can access the online self-guided HEAT training in the Honda Learning Center. If you have any questions on HEAT, please send an e-mail to hondacorporatetravel@ahm.. Beginning April 1, 2021, Honda will adopt a standard approach to career levels that will establish a common organizational hierarchy and define expectations for each level. The career levels and skills framework are the foundation for HR programs such as compensation, advancement, performance, and rewards, and learning and development.

Compensation and Benefits

Payroll

Beginning January 2022, Honda will align several payroll practices to new standards that will

improve both the accuracy and efficiency of payroll services. These changes will apply to all

U.S. Honda associates.

1/1/2022

20

? All U.S. associate pay will align to a bi-weekly schedule (i.e., pay every other week).

? All U.S. associates will receive pay every other Friday.

? All U.S. associate pay method will be calculated and paid in arrears.

Beginning May 6, 2021, Honda will align production associate pay progression scales by

Compensation and Benefits

Non-Exempt Wage System

5/6/2021

18

adopting consistent timing and duration of scheduled wage increases. Production associates will have a six (6) year wage progression with wage increase steps every six months

beginning after the date of hire.

Starting April 1, 2021, for 98 Ki, a new performance management cycle will connect with a

standardized regional bonus. Bonuses are not guaranteed and are always dependent on

business conditions in any given period. The regional bonus plan will use a formula that

includes the following factors:

Compensation and Benefits

Bonus Sharing

4/1/2021

Compensation and Benefits

Payroll Week

1/1/2022

? Individual Performance (Non-Production Roles) / Attendance (Production Roles)

? Salary Grade Level Targets

? Annual Global Financial Results (ROS)

NA

? Regional Factor

The regional bonus plan will be integrated into the overall compensation structure and will

better recognize and reward the efforts and contributions of our associates who are highly

motivated and strong contributors toward achieving the company' s goals.

Additionally, regional bonus plan timing will be aligned to August. This new timing will

impact the 98Ki regional bonus that will be paid in August 2022 (99Ki).

The 97Ki bonus, will follow same schedule and formula in 2021 following current practices at

each company.

Beginning January 1, 2022, all U.S. associate pay periods will begin on a Monday and end

20

on Sunday.

Compensation Shift Premium 5/6/2021

22

Beginning May 6, 2021, Honda will implement consistent non-exempt shift premiums, also

and Benefits

known as shift differential, to recognize associates working non-traditional shifts. All non-

exempt associates will receive a shift premium rate of $1.10 in addition to the normal

hourly wage for working a scheduled second or third shift.

Policy Application

Policy

Effective Page

Date

Number

Change Point

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Beginning 4/1/2022, HDMA will observe the following holidays:

Attendance and Time Off

Holiday/Shutdown Pay and Paid Holidays

4/1/2022

N/A

Attendance and Time off

Paid Time Off/Accrual

1/1/2022

PTO/Vacation Structure

Beginning January 2022, Honda will standardize the Paid Time Off (PTO)/Vacation structure

that determines annual PTO/Vacation accruals based on years of service. Additional transition

28

information will be provided to associates that may be impacted negatively by this change before January 2022. Below shows the new PTO/Vacation structure.

Years of Service

1 to 4

5-14

15 or more

Annual Vacation Days

10

15

20

Beginning May 6, 2021, the monthly attendance bonus will have a maximum annual value of

$2340. Associates will qualify for an attendance bonus if they have had perfect attendance

for all regularly scheduled hours during any consecutive four (4) week period.

Compensation and Benefits

Attendance Bonus

5/6/2021

21

New Vehicles

Currently, all Honda associates have access to Team Honda Purchase Program (THPP) that

provides discounts on automotive purchases for both the associate and eligible family

members.

Used Vehicles

Beginning April 1, 2021, Honda will begin to standardize the used vehicle purchase

programs to simplify the process and provide this benefit consistently to our associates

Compensation and Benefits

Honda Product Purchase Program

4/1/2021

across the U.S.

N/A

? AHM and HDMA will maintain separate used car sales and associates will be

eligible to purchase used vehicles from their company only.

? Pricing will be determined using the black book wholesale average less 10%.

? The lottery system will be used to determine "winners" who can purchase a used

vehicle.

? Full-time associates are permitted two used vehicle purchases per calendar year

(including current AHM leases, if applicable).

? In some cases, used cars may be located out of state and vehicle shipping will be

the responsibility of the associate (if applicable).

Beginning April 1, 2021, Honda will begin distributing an adhesive overlay (sticker) for

associate security (ID) badges. This process will enable associates to maintain their

security access without disruption. Honda security teams will distribute the new overlay with

Payroll

Identification Cards

4/1/2021

20

further instructions.

Security data needed to gain access to your assigned facility and clock-in is stored in your old

Honda badge, so it is important not to damage or lose your badge. Any lost or damaged

badges should be immediately reported to security.

Safety,

Safety Shoes

4/1/2021

45

Beginning April 1, 2021 Honda will adopt a consistent reimbursement amount of non-specialty

Security and

safety footwear. Associates can receive reimbursement up to $100 per calendar year for one

Health

(1) pair of non-specialty safety footwear. Associates will continue to follow their current

location practice for purchase and reimbursement requests.

Based on identified hazards, some departments/processes require special safety footwear. Associates will follow department procedures for purchase, reimbursement, use, care, and storage of specialty safety footwear.

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Non-Production Associates (All Exempt Positions, Non-Exempt Support Staff)

Policy Application

Performance Management

Policy

NEW Performance Management

Effective Date

4/1/2021

Page Number

NA

Change Point

Beginning April 1, 20201, HDMA will begin a regional program that is based on the competency and skills framework defined for each career level and includes additional self-development initiatives. Associates will be assessed annually and receive two separate performance ratings:

1. Competency Rating: Measures an associate's performance against the established competencies and skills framework as defined for each career level. The competency rating will be used to determine the associate's annual merit increase.

2. Business Goal Rating: Measures an associate's performance on agreed upon business objectives and priorities. The business goal rating will be used to determine

the associate's annual bonus amount.

For the performance year beginning April 1, 2021, the adoption of a standard approach to merit (pay) increases will provide improved differentiation in rewards for associates who are highly

motivated and contributing proficiently toward the achievement of company goals.

Compensation and Benefits

Merit Increases

4/1/2021

NA

? Two-Rating System: The rating for business goals will be used to inform the regional bonus whereas the competency rating will inform the merit increase.

? Standard Merit Methodology: Merit increases are determined by both the annual competency rating and the individual's position within their salary range.

? Merit Timing: At the conclusion of 98Ki (fiscal year), merit increases will be effective in June. This alignment impacts merit increases beginning in 2022.

Short-Term Disability (STD) will replace Salary Continuation benefits for Exempt associates

and Non-Exempt associates classified as Professional Support Staff.

Compensation and Benefits

NEW Exempt ShortTerm Disability

4/1/2021

NA

? The Salary Continuation program for Exempt associates and for Non-Exempt associates classified as Professional Support Staff will end for new absences beginning on or after April 1, 2021.

? FMLA Intermittent absences taken on or after April 1, 2021 will be unpaid. Associates

may use PTO/Vacation to receive pay.

Exempt and non-exempt professional staff will be eligible for a benefit, Honda Disability Allowance (HDA). Honda Disability Allowance provides up to 40% wage replacement benefits in addition to short-term disability benefits as follows:

Compensation and Benefits

NEW Honda Disability

Allowance

4/1/2021

NA

For continuous leaves beginning on or before March 31, 2021, current policies will remain in effect until the associate returns to work, associate exhausts 26 weeks of Salary Continuation benefits, or the associate is no longer eligible for a leave of absence. For intermittent leaves, salary continuation will no longer be paid on or after April 1, 2021.

Effective April 1, 2021, initial mapping to new grades/levels will take place. No immediate changes will be made to associates' current pay; however, during 98Ki, each job will be evaluated, and the Career Level/Compensation grade will be finalized.

Compensation and Benefits

NEW Personalized Grade/Level

4/1/2021

NA

Careel Levels fundamentally defines one's level of responsibility or expectation within the

company. Compensation Grades are based on the job being performed and the skills,

experience, and knowledge required to perform the job

Exemption status (Exempt or Non-Exempt) defines one's eligibility for overtime pay based on the type of work performed as defined by the Fair Labor Standards Act (FLSA)

Within a given Career level, there can be both Non-Exempt & Exempt work as well as multiple Compensation grades.

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Denotes upcoming policy change previously announced

As always, please take the time to review the Associate Handbook and understand all of TMP-OMD's operating policies. If you were to have any questions regarding TMP-OMD's policies or practices, please contact your department leadership team or Human Resources. If you see "**See associate letter matrix," please refer to the matrix above for the updated policy Sincerely, HDMA HR

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